Williams Company Purchased a Machine Costing $25,000 and Is Depreciating

question 130

Multiple Choice

Williams Company purchased a machine costing $25,000 and is depreciating it over a 10-year estimated useful life with a residual value of $3,000.At the beginning of the eighth year,a major overhaul on it was completed at a cost of $8,000,and the total estimated useful life was changed to 12 years with the residual value unchanged.How much is the year 8 depreciation expense assuming use of the straight-line depreciation method?

• A)$2,200.
• B)$2,920.
• C)$3,100.
• D)$8,800.

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Definitions:

Income Increases

The rise in earnings received by an individual or household, which can impact consumption, savings, and investment behaviors.

Opportunity Cost

Opportunity cost represents the value of the best alternative foregone when a decision is made to choose one option over another.

Optimum

Refers to the best or most favorable condition, value, or level of something.

Budget Constraint

A budget constraint represents the combination of goods and services that a consumer can purchase with their limited income.